An Evaluation of Customer Attitudes Toward Digital-Only Banks: A Case Study of Kuda Bank, Abuja

An Evaluation of Customer Attitudes Toward Digital-Only Banks: A Case Study of Kuda Bank, Abuja

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Background of the Study
Digital-only banks have emerged as disruptive players in the financial services industry by offering streamlined, technology-driven banking solutions without physical branches. Kuda Bank in Abuja exemplifies this new wave of financial institutions, attracting customers with user-friendly mobile applications, low fees, and innovative financial products (Umar, 2023). The absence of traditional branch networks allows digital-only banks to offer competitive interest rates, rapid account opening processes, and personalized financial management tools, which have reshaped customer attitudes toward modern banking.
The convenience of banking through digital platforms, coupled with advanced analytics and artificial intelligence, has enhanced the overall customer experience. Kuda Bank’s emphasis on real-time transactions, automated savings, and integrated financial insights has fostered a positive perception among tech-savvy customers. However, challenges remain regarding customer trust, data privacy, and the digital divide. Some segments of the population exhibit skepticism about the security and reliability of digital-only banking services (Akinola, 2024).
This study investigates customer attitudes toward digital-only banks, focusing on Kuda Bank’s innovative approach and its impact on customer satisfaction and loyalty. By evaluating both the benefits and the concerns associated with digital-only banking, the research seeks to provide a comprehensive analysis of consumer preferences and expectations in the rapidly evolving digital financial landscape (Ibrahim, 2025).

Statement of the Problem
While digital-only banks like Kuda Bank offer numerous advantages, there is evidence of mixed customer attitudes that could hinder widespread adoption. Concerns over data security, limited physical support, and the perceived impersonal nature of fully digital services contribute to customer hesitancy (Umar, 2023). Additionally, while many young and tech-savvy customers embrace digital-only banking, older or less technologically adept customers often feel excluded or overwhelmed by the lack of traditional support channels.
These divergent attitudes create challenges for digital-only banks in building trust and achieving market penetration. The absence of physical branches can also lead to difficulties in resolving complex issues, which in turn may negatively impact customer satisfaction. This study aims to examine the factors that shape customer attitudes toward digital-only banks, specifically analyzing the strengths and weaknesses of Kuda Bank’s service model. By identifying the critical areas of concern and the aspects that drive positive customer experiences, the research intends to offer recommendations for improving customer trust and satisfaction in a digital-only banking environment (Akinola, 2024).

Objectives of the Study

• To evaluate customer attitudes toward digital-only banking services at Kuda Bank.
• To identify factors influencing customer trust and satisfaction in digital-only banks.
• To recommend strategies to enhance customer engagement and trust in digital banking.

Research Questions

• What are the prevailing customer attitudes toward digital-only banking at Kuda Bank?
• What factors contribute to positive or negative perceptions of digital-only banks?
• How can digital-only banks improve trust and customer satisfaction?

Research Hypotheses

• H₁: Positive digital user experiences are significantly associated with favorable customer attitudes.
• H₂: Perceived security concerns negatively impact customer trust in digital-only banks.
• H₃: Enhanced customer support through digital channels improves overall satisfaction.

Scope and Limitations of the Study
This study focuses on customer attitudes toward Kuda Bank’s digital-only services in Abuja. Limitations include sample biases, rapid technological changes, and differences in digital literacy levels among customers.

Definitions of Terms

• Digital-Only Banks: Banks that operate exclusively through digital platforms without physical branches.
• Customer Attitudes: Perceptions and feelings of customers toward banking services.
• Digital Engagement: Interaction between customers and digital banking platforms.

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